Saturday 24th October 2020

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Posts tagged ‘nickel’

Stan Sudol suggests Elon Musk invest in Ontario mines to ensure Tesla’s nickel supply

September 18th, 2020

…Read more

European Union looks to Canada and others for critical minerals supply

September 4th, 2020

by Greg Klein | September 4, 2020

The EU’s newly released 10-point critical raw materials action plan calls for development of European supplies and supply chains, as well as further re-use and recycling. But for those materials not found on the continent, the European Commission says, “pilot partnerships with Canada, interested countries in Africa and the EU’s neighbourhood will start as of 2021. In these and other fora of international co-operation, the commission will promote sustainable and responsible mining practices and transparency.”

European Union looks to Canada and others for critical minerals supply

The commission made the proclamation September 3 as part of its Green Deal, a program to achieve a climate-neutral, digital economy and “stronger Europe.” As has been the case in the U.S. over the last four years, the continent has been expressing increasing concern about security of supply for necessary resources. The EU also released an updated list of critical raw materials, the first since 2017.

Using the same methodology that emphasizes economic importance and supply challenges, the new list numbers 30, compared with 27 in 2017. Added for the first time are lithium, bauxite, titanium and strontium. Helium was dropped due to a decline in economic importance.

Heavy rare earths, light rare earths and scandium rate three separate categories. Also included are critical standbys like niobium, tantalum, fluorspar, cobalt and platinum group metals. Not exclusive to minerals, the list includes natural rubber.

Coking coal, phosphorus and silicon metal ranked among EU choices that didn’t make the most recent (from 2018) U.S. list of 35 critical minerals. Some other American exclusives not listed by the EU are helium, manganese, potash and chromium.

The commission referenced World Bank data showing “demand for metals and minerals increases rapidly with climate ambition. The most significant example of this is electric storage batteries, where the rise in demand for relevant metals aluminium, cobalt, iron, lead, lithium, manganese and nickel would grow by more than 1,000% by 2050 under a 2°C scenario, compared to a business-as-usual scenario.”

The commission’s Maroš Šefčovič added, “For e-car batteries and energy storage alone, Europe will for instance need up to 18 times more lithium by 2030 and up to 60 times more by 2050.”

Supply security can be jeopardized by reliance on a single country or company, the commission warned. “China provides 98% of the EU’s supply of rare earth elements, Turkey provides 98% of the EU’s supply of borate, and South Africa provides 71% of the EU’s needs for platinum and an even higher share of the platinum group metals iridium, rhodium and ruthenium. The EU relies on single EU companies for its supply of hafnium and strontium.”

The commission’s specific mention of Canada as a preferred supply source follows the Joint Action Plan on Critical Minerals Collaboration that the U.S. and Canada announced in January and reaffirmed last June.

Stan Sudol to Elon Musk:

July 26th, 2020

Stop fretting over potential nickel shortages and back some potential nickel mines

by Stan Sudol | posted with permission of Republic of Mining

Stop fretting over potential nickel shortages and back some potential mines

As its Gigafactory continues to ramp up production, Tesla already
produces more kWh of batteries than all other automakers combined.
(Photo: Tesla Inc.)

 

Elon Musk is practically begging nickel miners to boost production as potential future shortages would severely impact his ability to manufacture electric vehicles, as the metal is a key component for the batteries Tesla Inc. depends on.

Historically, nickel has always been a boom/bust metal due to the fact the world only produces about 2.1 million tonnes of the material a year, as opposed to a more commonly used metal like copper at 20 million tonnes. And roughly only half of nickel production is of the Class-1 type that is used in batteries that run electric vehicles.

Currently the cost of nickel is nearing a cyclical bottom, hence the reluctance of nickel miners to invest the possible near-billion it takes to bring on a new mine.

Musk is a multi-billionaire and his company stock is at an all-time high. Instead of whining to the mineral industry to invest “their shareholder money” in new nickel production at a time of low returns, here are some suggestions to calm his fear of future shortages:

 

Stop fretting over potential nickel shortages and back some potential mines

“At the heart of these products are batteries,” says Tesla.
But Elon Musk worries about the nickel needed to make them.
(Photo: Joni Hanebutt/Shutterstock.com)

1. Why can’t Tesla start stockpiling Class-1 nickel now during a time of low prices? The American military stockpiled nickel during the 1950s and 1960s as it was in constant short supply due to a booming economy and its use as a critical metal for military production—the Korean conflict, Vietnam War and the Cold War between the U.S.A. and U.S.S.R. What is to prevent the company from stockpiling two or three years’ worth of nickel needed for its car batteries? This would help firm up prices and encourage more exploration or expanded production.

During the 1950s, the U.S. government gave Falconbridge/Glencore a $40-million subsidy—roughly an astonishing $390 million in 2020 dollars—to help develop one of their Sudbury nickel mines and ensure diversity of supply. At the time, INCO supplied almost 80% to 90% of the West’s supply of nickel and the military were terrified of being so dependent on one key supplier. Perhaps subsidizing a few companies that are near production might be the route to go.

 

2. Polish miner KGHM has a terrific nickel deposit—the Victoria in the Sudbury Basin. They don’t seem to be that interested in developing the project that some analysts feel would need roughly a billion to put into production.

For much of the last century, the Sudbury Basin was basically the Saudi Arabia of nickel mining for the Western world.

Just a quick tangent for any Americans or Canadians who are not “mine literate.” For much of the last century, the Sudbury Basin was basically the Saudi Arabia of nickel mining for the Western world. The communist East had the astonishingly rich nickel mines of Norilsk, located in the isolated wilderness of Siberia. There are still enormous nickel reserves in the Sudbury Basin. Why we are not producing more would practically take an entire book to explain!

Why doesn’t Musk try to buy the deposit from KGHM and hire contractors to build and run his own mine? He would get nickel, copper and some cobalt for his car batteries. In addition, the mine would also provide him with platinum group metals and some gold and silver. If KGHM refuses to sell at a reasonable price, Ontario/Canada might enact some sort of “build/sell it or lose it” legislation!

 

3. Sudbury junior miner Wallbridge Mining has some very promising nickel properties in the Parkin Offset Dyke in the northeastern corner of the Sudbury Basin. According to the Wallbridge website, “The quality of the mineralization found in the Parkin Offset is high. The average nickel tenor for the mineralization found within the Parkin Offset is approximately 4%, which is comparable to the tenors of some deposits found in the Copper Cliff Offset Dyke.” Some of the Sudbury Basin’s biggest nickel mines, past and present, are on the Copper Cliff Offset Dyke, hence the importance of that statement!

Unfortunately, Wallbridge is not doing any exploration on this property during 2020 as the company is focused on its Quebec gold properties. Who can blame it with the precious metal hitting $1,900 an ounce? Why doesn’t Musk buy an equity position in the junior and fund it to the tune of $20 million or $40 million worth of exploration on the Parkin Offset Dyke?

 

4. Another junior nickel explorer that might be worth looking at is Canada Nickel and its promising nickel-cobalt sulphide project near Timmins, Ontario. A maiden resource estimate last February showed 600 million tonnes (measured and indicated) at 0.25% nickel and 310 million tonnes (inferred) at 0.23% nickel. As with all junior explorers, financing is always a challenge. Perhaps a significant equity position by Musk in exchange for future nickel and cobalt would ensure Tesla has no problems accessing these critical metals.

 

For crying out loud, it’s a skinny 300-kilometre gravel road and a couple of bridges. We are not building the Panama Canal or the Pyramids of Giza!

5. And finally there is the enormous mineral potential of the Ring of Fire with a 43-101 nickel deposit owned by junior miner Noront Resources. More nickel deposits may be discovered. Perhaps Musk could chat with Premier Ford and impress on him the importance of shortening environmental assessments and building that road into the Ring of Fire. For crying out loud, it’s a skinny 300-kilometre gravel road and a couple of bridges. We are not building the Panama Canal or the Pyramids of Giza! In the 1940s, the Canadian-Alaskan highway—roughly 2,700 kilometres—was built in eight months. No typographical error folks, less than one year!

The proposed road is on the traditional territories of Webequie and Marten Falls first nations, who both want it built. Hell, Musk should even consider putting a few hundred million in financing that road—I say this only half in jest as both the provincial and federal levels of government might be broke before construction starts.

And Premier Ford might even share the seat on that bulldozer with Musk to start building that vital road which was promised during the 2018 Ontario election campaign.

The Ring of Fire not only has nickel but potentially significant deposits of copper, zinc and various other critical metals along with chromite. And Premier Ford might even share the seat on that bulldozer with Musk to start building that vital road which was promised during the 2018 Ontario election campaign. It’s been a little over two years since the Conservatives have come to power and the patience of the entire sector is wearing thin! Road construction would be a terrific infrastructure investment to help alleviate the pending COVID recession/depression!

 

6. Sorry about the Ring of Fire road digression. I have not even mentioned the Thompson, Manitoba Nickel Belt, Newfoundland’s Voisey Bay nickel mine and Quebec’s Raglan nickel deposits, all of which probably have some juniors that could use some seed funding to drill near these world-class deposits—as the old saying goes, the best place to find a new mine is in the shadow of a headframe.

 

So I wish Elon Musk all the best, but please stop complaining about possible Class-1 nickel shortages and perhaps start strategically investing in the Canadian nickel sector yourself, if you really want to ensure that you have access to this vital metal.

 

For a brief history of the extraordinary Sudbury nickel deposits and their geo-political significance, click here.

Stan Sudol is a Toronto-based communications consultant, freelance mining columnist and owner-editor of Republic of Mining.

Posted with permission of Republic of Mining.

Global top 40 miners stand up to pandemic but face further challenges, says PwC

July 24th, 2020

by Greg Klein | July 24, 2020

For all the tribulations facing mining, the industry has been faring well compared to others. That’s the verdict of the recent PwC report Mine 2020: Resilient and Resourceful. But the publication warns that caution, adaptation and innovation must continue to safeguard the future.

Global top 40 miners stand up to pandemic but face further challenges, says PwC

If the top 40’s performance reflects the wider industry,
mining will prevail over the pandemic, this report maintains.
(Photo: PwC)

The survey looks at the world’s top 40 listed miners by market cap as of December 31. For the third year in a row, six Canadian companies made the list.

The IMF predicts global economic contraction of 3% this year, only the third comparable event since 1944. Yet PwC maintains that mining’s top 40 “are in an excellent position to weather the storm.”

Although the companies’ 2019 EBITDA performance remained flat at US$168 billion, PwC foresees a 6% decline this year, with capital spending falling at least 20% due to reduced revenue as well as pandemic-related staffing and mobilization difficulties.

Still, the decline will be temporary as past performance puts the top 40 “in a strong financial position as they enter one of the more uncertain economic periods in living memory. Liquidity is improved, and solvency is consistent.”

The pandemic’s effect on commodity prices ranges from double-digit drops for copper, nickel and zinc, to record prices for gold. Iron ore has remained relatively steady and looks promising due to early recovery in China and strong GDP growth predicted for that country and India in coming years.

In a recommendation that itself presents challenges, however, PwC suggests miners seek greater diversification of customers to wean themselves off of the two Asian giants.

Mining companies may think they’re an unlikely target for cyberattacks, but as reliance on autonomous and digital technology grows, so too does the cybersecurity risk. And the consequences can be a matter of life or death.—PwC Mine 2020

As for gold’s steep ascent, “don’t expect this to continue.” With 2020 yellow metal M&A down 33% from the same period last year, “gold miners appear to have learnt their mistakes from the early 2010s and are avoiding the pitfalls of pursuing large cash and debt-backed deals in a rising price environment. We expect gold deals to be less frequent and smaller this year and next, with more transactions on a scrip-for-scrip basis.”

Under the circumstances smaller, local property acquisitions might prove more attractive to the top miners. Locally available resources, along with globally diverse deposits, would help strengthen critical supply chains too. Pointing to fragile links further weakened by COVID-19, PwC also called for improved inventory management. The measures “would not only de-risk mining companies against a similarly disruptive event but also help develop and build resilience in local communities,” the report states. “Many are already doing it; Anglo American, Nornickel and BHP among others, have announced initiatives to increase support for their domestic suppliers as a result of the pandemic.”

PwC also emphasized the need to strengthen cybersecurity, and to address environmental, social and governance accountability, calling for a global ESG standard.

For the third year running, six Canadian companies made the top 40 list with the present group including Barrick Gold TSX:ABX, Agnico Eagle Mines Group TSX:AEM, Teck Resources TSX:TECK.A/TSX:TECK.B, Kirkland Lake Gold TSX:KL, First Quantum Minerals TSX:FM and Kinross Gold TSX:K. Newcomer Kinross kept Canada’s half-dozen steady following the takeover of Goldcorp by Denver-headquartered Newmont TSX:NGT. Among companies poised to join next year is Vancouver-headquartered Pan American Silver TSX:PAAS.

Read the PwC report.

Mining Association of Canada CEO Pierre Gratton sees additional opportunities for this country’s resources

July 21st, 2020

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Poll shows Canadians back sustainable production of critical minerals

May 13th, 2020

by Greg Klein | May 13, 2020

A Mining Week announcement from the Mining Association of Canada expresses public opinion on an issue of increasing prominence. A survey by Abacus Data shows almost 90% of respondents “like the idea of Canada being a preferred source for critical minerals and would like to see government take a number of steps to support this approach,” MAC reported.

Poll shows Canadians back sustainable production of critical minerals

Increasing demand, supply chain weaknesses, and rivalries in trade and geopolitics have heightened concern for raw materials necessary for the aerospace industry, defence, communications, computing, medicine and clean energy.

“China has been a major supplier of these minerals but Canada has an opportunity to play a larger role in this marketplace as customers look for products made to high environmental standards,” MAC stated, pointing to its Towards Sustainable Mining program.

Among the survey’s findings:

  • 88% of respondents want Canada to increase its role in producing critical minerals for world markets

  • 86% want to encourage international investment in Canadian critical minerals and metals companies that are sustainability leaders

  • 83% want to encourage Canadian production of critical minerals to compete with China

  • 81% want to promote interest in Canadian critical minerals by drawing attention to Canada’s high standards of sustainability

MAC commissioned the online nationwide poll. Conducted between March 3 and 11, it surveyed 2,600 people weighted according to census data. Abacus gave the results a margin of error of plus or minus 1.92%, 19 times out of 20.

Canada is a top five country in global production of 15 minerals and metals, including several critical minerals essential to new technologies such as cobalt, copper, precious metals, nickel, uranium. We have the potential to expand in lithium, magnesium and rare earths.—Pierre Gratton, president/CEO,
Mining Association of Canada

“More than a decade of Canadian leadership in responsible mining practices is giving us an additional edge, and we see more investors and customers examining how their suppliers approach environmental responsibility,” said MAC president/CEO Pierre Gratton. “The market is growing and Canada’s opportunity is clear.”

In January Canada and the U.S. announced their Joint Action Plan on Critical Minerals Collaboration, which the Canadian industry expects will attract investment and encourage further development of supply chains. The plan follows a number of American initiatives to reduce its dependence on rival countries, especially China.

MAC also pointed to the Canadian Minerals and Metals Plan, a federal-provincial effort intended to enhance competitiveness, innovation and native participation in mining.

“Canadians may not all have a detailed knowledge about the mining sector,” added Gratton, “but they can clearly spot the chance to leverage our advantages in terms of abundant resources and the high standards of responsibility that our industry is known for. They know that winning a bigger share of this growing market means more well-paying jobs and stronger communities.”

According to figures supplied by MAC, mining contributes $97 billion to national GDP and 19% of total domestic exports. Employing 626,000 people directly and indirectly, the industry is proportionally Canada’s largest private sector employer of natives and a major customer of native-owned businesses.

International Montoro Resources furthers rare earths potential in B.C.

May 13th, 2020

by Greg Klein | May 13, 2020

Detailed analysis of field work shows the rare earths prospects of an early-stage project in east-central British Columbia. On May 13 International Montoro Resources TSXV:IMT announced a report culminating from last year’s grid-based survey of 535 soil samples on the 2,007-hectare Wicheeda North property.

International Montoro Resources furthers rare earths potential in BC

Previous work came under detailed analysis for International
Montoro Resources’ Wicheeda North REE prospect.
(Photo: International Montoro Resources)

“Thematic geochemical anomaly maps were generated for cerium and other values were received for light REEs including lanthanum, neodymium, praseodymium, samarium, europium and gadolinium,” the company stated.

The report was prepared by Bob Lane, who managed 2008 and 2009 drilling programs on the adjacent Wicheeda project, later acquired by First Legacy Mining, now Defense Metals TSXV:DEFN. Lane also took part in First Legacy’s 43-101 report on Wicheeda.

Commenting on International Montoro’s Wicheeda North, Lane said it “has the potential to host, and should continue to be explored for, REE mineralization because it occurs within a favourable geological belt known to contain carbonatite-hosted REE mineralization, such as the Main zone” of the Defense project neighbouring to the southeast.

Future recommendations include further prospecting and grid-based soil sampling. Additionally, airborne electromagnetics were suggested for the southern part of the property, which wasn’t surveyed in the EM, magnetic and radiometric geophysics conducted in 2010.

Given favourable results, Lane’s report recommends the company consider excavator trenching.

Last February the company announced exploration plans for its Camping Lake property in Ontario’s Red Lake region. Under an October 2019 agreement with Falcon Gold TSXV:FG, International Montoro may earn a 51% interest in the gold-base metals project.

Reporting on another Ontario project, International Montoro released geophysical analysis from Serpent River in December. The conclusions could indicate massive sulphide nickel-copper-PGE-gold mineralization on the Elliot Lake-region property, the company stated.

International Montoro’s portfolio also includes the Duhamel polymetallic project in Quebec’s Saguenay-Lac-Saint-Jean region.

Last month the company closed a private placement of $56,525.

Robust or bust

May 7th, 2020

Will supply chain challenges culminate in a long-overdue crisis?

by Greg Klein | May 7, 2020

It might take premature complacency or enormously good fortune to look back and laugh at the Early 2020 Toilet Paper Panic. But from today’s viewpoint, bumwad might be the least of our worries. There won’t be much need for the stuff without enough food to sustain life. Or water. Medicine, heat and electricity come in handy too.

Sparsely stocked supermarket shelves have been blamed on hoarders who thwart the industry’s just-in-time system, a process credited with “robust” reliability when not challenged by irrational buying sprees. Consumer concern, on the other hand, might be understandable given the credibility of official positions such as Ottawa’s facemask flip-flop and initial arguments that closing borders would actually worsen the pandemic.

Will supply chain challenges culminate in a long-overdue crisis?

A North Vancouver supermarket seen in mid-March. While
stockpiling has abated, supply lines show signs of stress.
(Photo: Steeve Raye/Shutterstock.com)

Meanwhile Canadian farmers worry about the supply of foreign labour needed to harvest crops, dairy farmers dump milk for lack of short-distance transport and deadly coronavirus outbreaks force widespread closures of meat and poultry plants across Canada and the U.S.

Highlighting the latter problem were full-page ads in American newspapers from meat-packing giant Tyson Foods. “The food supply chain is breaking,” the company warned in late April. “Millions of animals—chickens, pigs and cattle—will be depopulated because of the closure of our processing facilities.”

Within days the U.S. invoked the Defense Production Act, ordering meat plants to stay open despite fears of additional outbreaks. 

Just a few other pandemic-related food challenges in Canada include outbreaks at retail grocers, a shortage of packaging for a popular brand of flour and an Ontario supermarket warning customers to throw away bread in case it was tainted by an infected bakery worker.

Infrastructure supplying necessities like energy, fuel, water and communications faces pandemic-related challenges of its own, including availability of labour and expertise.

Supply chain complexity has been scrutinized in The Elements of Power: Gadgets, Guns, and the Struggle for a Sustainable Future in the Rare Metal Age. One example from author David S. Abraham was the electric toothbrush, a utensil comprising something like 35 metals that are sourced, refined and used in manufacturing over six continents.

Dissecting a 2017 smartphone, the U.S. Geological Survey found 14 necessary but mostly obscure elements. As a source country, China led the world with nine mineral commodities essential to mobile devices, and that list included rare earths in a single category.

In a recent series of COVID-19 reports on the lithium-ion necessities graphite, cobalt, lithium and nickel, Benchmark Mineral Intelligence stated: “From the raw material foundations of the supply chain in the DRC, Australia, Chile and beyond, through to the battery cell production in China, Japan and Korea, it is likely that the cells used by the Teslas of the world have touched every continent (sometimes multiple times over) before they reach the Model 3 that is driven (or drives itself) off the showroom floor.”

Will supply chain challenges culminate in a long-overdue crisis?

Consumers might not realize the complex
international networks behind staple items.

Or consider something more prosaic—canned tuna.

That favourite of food hoarders might be caught in the mid-Pacific, processed and canned in Thailand following extraction of bauxite (considered a critical mineral in the U.S.) in Australia, China, Guinea or elsewhere, with ore shipped for smelting to places where electricity’s cheap (China accounted for over 56% of global aluminum production last year). Then the aluminum moves on to can manufacturers, and transportation has to be provided between each point and onward to warehouses, retailers and consumers. Additional supply chains provide additional manufactured parts, infrastructure, energy and labour to make each of those processes work.

Still another supply chain produces the can opener.

Daily briefings by Canada’s federal and provincial health czars express hope that this country might “flatten the curve,” a still-unattained goal that would hardly end the pandemic when and if it’s achieved. Meanwhile the virus gains momentum in poorer, more populous and more vulnerable parts of the world and threatens a second, more deadly wave coinciding with flu season.

And if one crisis can trigger another, social order might also be at risk. Canada’s pre-virus blockades demonstrated this country’s powerlessness against a force not of nature but of self-indulgence. Even a cohesive, competent society would have trouble surviving a general infrastructure collapse, a scenario dramatized in William R. Forstchen’s novel One Second After. When transportation, communications, infrastructure and the financial system break down, so do a lot of people. Dangerous enough as individuals, they can form mobs, gangs and cartels.

How seriously Washington considers apocalyptic scenarios isn’t known. But prior to the pandemic, the U.S. had already been taking measures to reduce its dependency on China and other risky sources for critical minerals. Now, Reuters reports, COVID-19 has broadened American concerns to include other supply chains and inspired plans for an Economic Prosperity Network with allied countries. Questions remain about the extent that the West can achieve self-sufficiency and, in the U.S., whether another administration might undo the current president’s efforts.

Certainly globalist confidence persists. The Conference Board of Canada, for example, expects a slow return of supply chain operations to pre-pandemic levels but a renewed international order just the same. “Global co-operation is needed not only to tackle the health crisis, but also to restore trust in global supply chains and maintain the benefits that the growth in global trade has brought over the last two decades.”

Will supply chain challenges culminate in a long-overdue crisis?

New cars leave the manufacturing hub and disease
epicentre of Wuhan prior to the pandemic.
(Photo: humphery/Shutterstock.com)

One early COVID-19 casualty, the multi-continent diamond supply chain, already shows signs of gradual recovery according to Rapaport News. Despite mine suspensions, “there is more than enough rough and polished in the pipeline to satisfy demand as trading centres start to reopen. Belgium and Israel have eased lockdown restrictions, while India has allowed select manufacturing in Surat and special shipments to Hong Kong.”

Also struggling back to its feet is global automotive manufacturing. Writing in Metal Bulletin, Andrea Hotter outlines how the disease epicentre of Wuhan plays a vital role in making cars and supplying components to other factory centres. “If ever there was a masterclass in the need to disaster-proof a supply chain, then the COVID-19 pandemic has provided a harsh reminder to the automotive sector that it’s failing.”

So regardless of whether apocalyptic fears are overblown, there are lessons to be learned. As Benchmark points out, COVID-19 has disrupted “almost every global supply chain to such a profound extent that mechanisms for material sourcing, trade and distribution will likely never be the same again.”

In the meantime, a spare can opener or two might be prudent. Or maybe several, in case they become more valuable than bullion.

Mining resumes under COVID-19 but faces slow return: GlobalData

April 28th, 2020

by Greg Klein | April 28, 2020

Mining resumes under COVID-19 but faces slow return GlobalData

 

As of April 27 some 729 mines worldwide remain suspended, down from more than 1,600 shutdowns on April 3. The numbers, released by GlobalData, reflect government decisions to declare the industry an essential service, as well as implementation of new health standards and procedures. Those efforts, often involving staff reductions, contribute to “a slow return for the industry,” stated the data and analytics firm.

“Silver production is currently being severely damaged by lockdown measures,” pointed out GlobalData mining analyst Vinneth Bajaj. “As of 27 April, the equivalent of 65.8% of annual global silver production was on hold. Silver mining companies such as First Majestic, Hochschild, Hecla Mining and Endeavour Silver have all withdrawn their production guidance for 2020 in the wake of the outbreak.

Mining resumes under COVID-19 but faces slow return GlobalData

“Progress has also been halted on 23 mines under construction, including the US$5.3-billion Quellaveco copper mine in Peru, which is one of the world’s biggest copper mines currently under development…. In Chile, while a lockdown is not in force, Antofagasta has halted work on its Los Pelambres project and Teck Resources has suspended work on the Quebrada Blanca Phase II mine.”

Jurisdictions that have lifted suspensions include Quebec, India, Argentina, Zimbabwe and South Africa, GlobalData added. Countries with government-ordered lockdowns still in force include Bolivia (until April 30), Namibia (May 4), Peru (May 10) and Mexico (May 30).

At least one Mexico operator, Argonaut Gold TSX:AR, plans to re-open on May 18 under an exception for businesses operating in municipalities with few or no cases of COVID-19.

Quebec’s resumption of mining drew strong criticism from Makivik Corporation, which represents the Inuit of the province’s Nunavik region.

“Makivik will not entertain the opening of any mines at this time in Nunavik. This is very dangerous,” said corporation president Charlie Watt on April 17. “The Inuit-elected officials in the communities and in the different regional organizations need to be heard and need to make the decisions and call the shots.”

One day later production resumed at Glencore’s Raglan nickel mine. The company stated that Nunavik authorities have banned travel between the mine and regional villages to protect the local population. Local workers stay home with compensation, while the mine employs workers from the south, including Inuit who live in the south.

Without question this is taking a toll on all of our mines and service/supply companies.—Ken Armstrong, NWT and
Nunavut Chamber of Mines

Six mines still operating in Nunavut and the Northwest Territories use similar staffing precautions. “The mines are operating with reduced workforces which they must fly in by charter from as far away as eastern Canada,” said NWT and Nunavut Chamber of Mines president Ken Armstrong. “To protect vulnerable northern communities from the virus they have sent their local employees home with pay and they are maintaining costly and unplanned virus protection measures.”

Meanwhile Labrador politicians expressed concern about renewed operations at Champion Iron’s (TSX:CIA) Bloom Lake mine on the Quebec side of the Labrador Trough. On April 28 VOCM radio reported that MP Yvonne Jones asked the company to avoid the Wabush airport in her riding and transport employees entirely through Quebec. Member of the House of Assembly Jordan Brown said contractors were making unnecessary trips to the Newfoundland and Labrador side.

Another pandemic-caused Quebec mining suspension will stay on care and maintenance due to market forces. Renard owner Stornoway Diamond stated, “Despite positive signs in the diamond market in early 2020, the recent COVID-19 pandemic has resulted in the entire marketing chain and diamond price collapse.”

Prior to the suspension, Renard operated only through creditor support.

Another diamond casualty has been the Northwest Territory’s Ekati mine, which suspended operations last month. Majority owner Dominion Diamond Mines received insolvency protection on April 22.

Discovered in 1991 and opened in 1998, Ekati “provided nearly 33,000 person-years of employment, and $9.3 billion in business spending, with over half the benefits (51% of jobs and 69% of spending) going to northern residents and businesses,” the Chamber stated. “Billions of dollars in various taxes and royalties have also been paid to public and indigenous governments by the mine.”

Li-ion under the pandemic

April 20th, 2020

COVID-19 cuts energy minerals demand but heightens future shortages: Benchmark

by Greg Klein | April 20, 2020

The pandemic will shrink lithium-ion battery demand by at least 25% this year even prior to further economic setbacks. But electric vehicles hold greater likelihood than many other industries not only for recovery but growth. Current reductions in lithium, cobalt, graphite and nickel supply will only mean greater need later this decade, according to Benchmark Mineral Intelligence.

COVID-19 cuts energy minerals demand but heightens future supply shortages

In an April 16 webinar presented by managing director Simon Moores and head of price assessments Caspar Rawles, the two warned that pandemic conditions and responses will worsen an already critical supply scenario later this decade.

That “lost quarter” of a 25% reduction in demand will likely be just the beginning, Moores said. “If there’s going to be a longer economic impact, which is most likely going to happen, a severe economic impact globally, then of course we lose more than a quarter.”

Yet exponential growth should continue for Li-ion battery megafactories. Five years ago just three such plants were in production or planned, with capacity totalling 57 gigawatt hours. By 2018 the number of plants climbed to 52, for 1,147 GWh. This year the figures jumped to 130 plants totalling 2,300 GWh now in production or slated for completion by 2030. That’s enough for 43 million EVs averaging 55 kWh each.

That future seems distant, compared with the current production limitations brought on by health-related mine suspensions, along with delayed expansions and development of new mines. Transportation challenges also loom large, such as the South Africa lockdown that restricts cobalt transshipment from the Democratic Republic of Congo.

As the pandemic cuts supply, it curtails demand as well. Chinese automakers, the main producers of EVs, have largely shut down.

Lithium faced over-supply well before the pandemic, prompting cutbacks among majors like SQM, Albemarle, Ganfeng and Tianqi. “Also we saw that the majority of Tier 2 or 3 converters in China were already planning on going offline due to the low pricing we’ve seen in the market,” Rawles said.

So what that means down the road is those expansions which really need to be happening now to meet the future demand are not happening.—Caspar Rawles,
Benchmark Mineral Intelligence

“The key thing is that downturn in conversion capacity in China will mean that the backlog of spodumene feedstock material that’s sitting in China will take longer to work through, so we’re looking at a longer-term potential low-price environment,” he explained. “That threatens the economics of new projects of course and an increased risk of price volatility going forward…. So what that means down the road is those expansions which really need to be happening now to meet the future demand are not happening.”

What does a typical (35 GWh) NCM Li-ion battery plant consume in a year? Benchmark estimates 25,000 tonnes of lithium hydroxide or carbonate, 6,000 tonnes of cobalt hydroxide, 19,000 tonnes of nickel sulphate and 33,000 tonnes of graphite.

“The supply chain won’t be able to build quick enough to meet this electric vehicle demand,” emphasized Moores. Even if estimates of EV growth were cut by 25% to 30%, “you’re still not going to have enough mining capacity, chemical capacity in the supply chain to make these. The lithium-ion supply chain has to grow by eight to 10 times in a seven-year period, and now that might be pushed to a 10-year period.”

You’ve got a big lithium problem on the horizon, [supplying] only 19 million EVs, compared to the 34 million we think we’re going to need.—Simon Moores,
Benchmark Mineral Intelligence

Production from current mines and those likely to enter operation suggest about 900,000 tonnes of annual lithium supply by 2030, enough to power about 19 million EVs. That constitutes “a big, big problem,” Moores said. “You’ve got a big lithium problem on the horizon, [supplying] only 19 million EVs, compared to the 34 million we think we’re going to need.”

Showing “a similar trajectory,” cobalt supply estimates come to 228,000 tonnes by 2030, enough for only about 17.9 million EVs.

“The mining companies are being super-cautious or even beyond super-cautious, considering we’re going to need 34 million EVs-worth. And even if that goes down to 25 million, you’re still way off,” he added.

Future demand will continue to be dominated by China, Benchmark maintains. Of the 130 battery plants currently expected by 2030, China would host 93. The country’s capacity would equal about 1,683 GWh, enough for 31 million EVs averaging 55 kWh. A dismal second, Europe follows with 16 plants totalling 413 GWh for 7.4 million EVs. The U.S. would have just seven plants for 205 GWh and 3.7 million EVs.

Currently producing about 73% of Li-ion batteries, China’s forecast to maintain that proportion with about 70% of global production in 2029.

For all that, Moores said European megafactories and Tesla’s U.S.-based Gigafactories set an example for supply chains in other industries.

“What the coronavirus has shown is that truly global supply chains in the 21st century don’t work. They’re too fragile, there’s too many question marks out there. Even pre-coronavirus that was the case…. The battery industry was well ahead of the curve on localizing the supply chain as much as possible…. That will continue, I think it’s a blueprint for other industries to follow. The battery supply chain is ahead of the curve on that.”

But, he cautioned, “the U.S. has to take on the same scale as China.”